....so FUBar takes a look at the 21st-century Scrooge; the fat-cat CEO.
Every week one can read some article attacking or defending the trend in pay for CEOs. A less-discussed question seems at least as interesting - what has happened to the nature of their jobs? The conventional answer is that those jobs have become b i g g e r and this explains the rising paycheques. The Economist's Schumpeter, however, suggested earlier this year that CEO's have become less instrumental in their companies' performance as they have been more constrained and that - interestingly - that trend is driving up CEO compensation.
Leaving aside the seeming implication that 'everything that happens drives CEO pay higher', some research by Steve Kaplan is claimed to imply that in fact CEO pay at S&P 500 firms has been falling since 2000, both absolutely and relative to other '0.1-percenters'.
Both authors agree that average CEO's tenure in that position has fallen, even without the intervention of Christmas spirits, and other research is cited suggesting that companies with more constrained CEOs perform better.
So - CEO pay may or may not be increasing, and maybe tighter corporate governance improves a) corporate performance and b) the marginal product of CEOs. So many questions, but we'll close with an observation:
The distribution of earnings among popular music performers and pro athletes are often described as similar to those among managers, and two questions:
Does the evidence support the idea that CEO compensation levels and job structure is the outcome of a competitive market or of one rife with collusion, and
'What about the worker?'
See you at the FUBar.
